ROCHESTER HILLS, Mich., Nov. 10 /PRNewswire-FirstCall/ -- Energy
Conversion Devices, Inc. (ECD) (Nasdaq: ENER), the leading global manufacturer
of thin-film flexible solar laminate products for the building integrated and
commercial rooftop markets, today announced financial results for the quarter
ended September 30, 2008.
Total consolidated revenues for the quarter were $95.8 million, an
increase of 16 percent over the $82.4 million in revenues from the fourth
quarter of fiscal 2008, and 104 percent higher than revenues of $47.0 million
in the first quarter of fiscal 2008. Solar product sales were $89.5 million,
a 16 percent sequential increase and a 124 percent increase over the prior-
year quarter. The average selling price for solar laminates during the quarter
was $3.04.
Net income for the first quarter was $12.7 million, or $0.29 per fully
diluted share, compared to net income of $9.9 million, or $0.24 per fully
diluted share, in the fourth quarter of fiscal 2008, and a net loss of $7.6
million, or $0.19 per fully diluted share, in the year-ago period. The company
reported net operating cash flow of $26.5 million for the first quarter,
versus a use of cash of $14.8 million during the first quarter of fiscal 2008.
First quarter net income and per-share figures include preproduction costs
of $2.0 million or $0.05 per fully diluted share, restructuring costs of $0.2
million, or less than one cent per fully diluted share. The company also
recorded an "other-than-temporary impairment of investment" of approximately
$1.0 million, or $0.02 per fully diluted share, to reflect the decreased
market value of a floating rate note issued by Lehman Brothers.
Gross margin in the first quarter on solar product sales was 33.4 percent,
and total gross margin was 34.1 percent. United Solar Ovonic produced 30.8
MWs and shipped 29.5 MWs of solar laminates in the first quarter.
Mark Morelli, ECD's president and chief executive officer, said, "Fiscal
2009 is off to a strong start and demand continues for UNI-SOLAR products from
our target markets in Europe, Asia and the US. We recognize that there are
new challenges in the present environment, and we are actively managing our
business model accordingly. For example, our ongoing commitment to
operational excellence enabled us to complete the retrofit of our Auburn Hills
1 facility quickly, while simultaneously ramping a new production line in
Greenville ahead of schedule. These improvements elevated our productivity
during the quarter and contributed to stronger than anticipated gross
margins."
Harry Zike, ECD's vice president and chief financial officer, commented,
"Our strong balance sheet and fully funded growth plan differentiates us in
today's market. With a strong cash position, positive operating cash flow,
and an increasing earnings stream, we have the resources to fund demand-driven
growth."
Guidance for Second Quarter and Fiscal Year
For the fiscal second quarter ending December 31, 2008:
-- Consolidated revenues are expected to be $100 - $108 million.
-- Solar product sales are expected to be $95 - $103 million.
-- Gross margin on solar product sales is expected to be approximately 33
percent and total gross margin is expected to be approximately 34
percent.
-- Pre-production costs are expected to be $2.0 - $2.5 million.
-- Restructuring costs are expected to be $1.0 - $1.4 million.
For the full 2009 fiscal year ending June 30, 2009:
-- Total consolidated revenues are expected to be $455 - $485 million.
-- Solar product sales are expected to be $430 - $450 million.
-- Gross margin on solar product sales is expected to be approximately 34
percent, and total gross margin is expected to be approximately 35
percent.
-- Pre-production costs are expected to be $7.0 - $9.0 million.
-- Restructuring will be completed in the second quarter and costs are
expected to be $1.2 - $1.6 million. This is a reduction of $1.3 - $1.4
million compared to previous guidance.
"Looking ahead, we believe that our proven value proposition, strong
balance sheet, focus on operational excellence and sustained profitable growth
will continue to set us apart from the competition. We have the right
strategy, which is to target countries with the highest feed-in tariffs for
rooftop and building-integrated solar photovoltaic installations. Our
opportunity in the U.S. is even greater now that the federal ITC has been
extended. We continue to implement meaningful operational improvements which
lower our costs and help us meet the continued demand for our products. In
these uncertain times, our customers and partners place even greater value on
ECD's financial strength and operational stability," concluded Morelli.
Conference Call / Webcast Details
Management of Energy Conversion Devices will review these financial
results on a conference call on Monday, November 10, 2008, at 10:00 a.m. ET.
The dial-in number for the live audio call is 877-858-2512 or 706-634-6076
(international) with conference ID number 71196238. The conference call will
be webcast live over the Internet and can be accessed in the Investor
Relations - Conference Calls - section of the company's website at
www.ovonic.com.
An audio replay of the call will be available approximately two hours
after the conclusion of the call. The audio replay will remain available until
11:59 p.m., November 12, 2008, and can be accessed by dialing 800-642-1687 or
706-645-9291 (international), with conference ID number 71196238. The webcast
will also be archived on the company's website.
About Energy Conversion Devices
Energy Conversion Devices, Inc. (ECD) (Nasdaq: ENER) is the leader in
building integrated and commercial rooftop photovoltaics, one of the fastest
growing segments of the solar power industry. The company manufactures and
sells thin-film solar laminates that convert sunlight to energy using
proprietary technology. ECD's UNI-SOLAR(R) brand products are unique because
of their flexibility, light weight, ease of installation, durability, and
real-world efficiency. ECD also pioneers other alternative technologies,
including a new type of nonvolatile digital memory technology that is
significantly faster, less expensive, and ideal for use in a variety of
applications including cell phones, digital cameras and personal computers.
For more information, please visit www.ovonic.com.
This release contains forward-looking statements within the meaning of the
Safe Harbor Provisions of the Private Securities Litigation Reform Act of
1995. Forward-looking statements include statements concerning our plans,
objectives, goals, strategies, future events, future net sales or performance,
capital expenditures, financing needs, plans or intentions relating to
expansions, business trends and other information that is not historical
information. All forward-looking statements are based upon information
available to us on the date of this release and are subject to risks,
uncertainties and other factors, many of which are outside of our control,
that could cause actual results to differ materially from the results
discussed in the forward-looking statements. Risks that could cause such
results to differ include: our ability to achieve sustainable profitability;
our ability to maintain our customer relationships; our ability to expand our
manufacturing capacity in a timely and cost-effective manner; the worldwide
demand for electricity and the market for solar energy; the supply and price
of components and raw materials for our products; and the resolution of
pending legal disputes. The risk factors identified in the ECD filings with
the Securities and Exchange Commission, including the company's most recent
Annual Report on Form 10-K and most recent Quarterly Report on Form 10-Q,
could impact any forward-looking statements contained in this release.
ENERGY CONVERSION DEVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Quarter Ended
September 30,
2008 2007
Revenues
Product sales $90,801 $42,467
Royalties 1,344 1,015
Revenue from product development
agreements 3,271 2,877
Other revenues 349 683
Total revenues 95,765 47,042
Expenses
Cost of product sales 60,967 35,069
Cost of revenues from product
development agreements 2,181 1,709
Product development and research 2,190 3,462
Preproduction costs 1,977 2,545
Selling, general and administrative 14,434 11,695
Restructuring charges 244 2,515
Total expenses 81,993 56,995
Income (Loss) from operations 13,772 (9,953)
Other income (expense)
Interest income 2,604 2,452
Interest expense (2,732) -
Other nonoperating expense (926) (60)
Total other (expense) income (1,054) 2,392
Net income (loss) before income taxes 12,718 (7,561)
Income taxes 57 6
Net income (loss) $12,661 $(7,567)
Basic net income (loss) per share $.30 $(.19)
Diluted net income (loss) per share $.29 $(.19)
Shares used in calculation of net
income(loss) per share(1):
Basic 42,222 39,838
Diluted 43,052 39,838
(1) Excludes for 2008 the effect of the 3.4 million shares loaned
pursuant to the share lending agreement
ENERGY CONVERSION DEVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
September 30, June 30,
2008 2008
(unaudited)
ASSETS
Cash and cash equivalents $467,018 $484,492
Short-term investments 11,201 14,989
Accounts receivable (net) 63,165 53,525
Inventories 34,342 31,337
Assets held for sale 1,532 1,539
Property, plant and equipment (net) 443,390 404,119
Other 54,171 51,966
TOTAL ASSETS $1,074,819 $1,041,967
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and other current
liabilities $68,455 $52,103
Long-term liabilities 350,396 347,952
TOTAL LIABILITIES 418,851 400,055
STOCKHOLDERS' EQUITY 655,968 641,912
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,074,819 $1,041,967
ENERGY CONVERSION DEVICES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(In Thousands)
Quarter Ended
September 30,
2008 2007
(unaudited)
OPERATING ACTIVITIES:
Net Income (loss) $12,661 $(7,567)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating
activities:
Depreciation and amortization 6,969 3,693
Stock and stock options issued for
services rendered 1,478 268
Other-than-temporary impairment of
investment 964 -
Other 330 713
Changes in working capital 4,130 (11,915)
NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES 26,532 (14,808)
INVESTING ACTIVITIES:
Purchases of property, plant and equipment
(including construction in progress) (46,909) (30,118)
Investment in joint venture (1,000) -
Purchase of investments - (42,400)
Proceeds from maturities of investments 2,700 66,760
Proceeds from sale of investments - 10,610
Proceeds from sales of property, plant and
equipment - 9
NET CASH (USED IN) PROVIDED BY INVESTING
ACTIVITIES (45,209) 4,861
NET CASH PROVIDED BY FINANCING ACTIVITIES 935 758
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS 268 118
NET CASH FLOW (17,474) (9,071)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 484,492 80,770
CASH AND CASH EQUIVALENTS AT END OF PERIOD $467,018 $71,699
ENERGY CONVERSION DEVICES, INC. AND SUBSIDIARIES
SEGMENT REVENUE AND OPERATING INCOME/(LOSS)
(In Thousands)
Quarter ended September 30,
2008 2007 2008 2007
Income (Loss) from
Revenues Operations
United Solar Ovonic $91,811 $41,887 $20,786 $(468)
Ovonic Materials 3,879 5,092 254 (700)
Corporate activities(1) 75 169 (7,327) (8,833)
Consolidating entries - (106) 59 48
Consolidated $95,765 $47,042 $13,772 $(9,953)
(1) Revenues consist primarily of services, facilities and miscellaneous
administrative and laboratory services provided to certain affiliates; expense
primarily includes corporate operations, including facilities, human
resources, legal, finance, information technology, business development,
purchasing and restructuring.
Segment Operations - United Solar Ovonic
(In Thousands)
Quarter ended
September 30,
2008 2007
PV product sales $89,450 $39,870
Megawatts produced 30.8 10.4
Megawatts shipped 29.5 13.1
Cost of product sales 59,589 32,622
Gross margin 29,861 7,248
Gross margin % 33.4% 18.2%
Research and development
revenue $2,361 $2,017
Total revenues 91,811 41,887
Other expenses:
Cost of revenues from
product development
agreements 1,555 1,150
Product development and
research 984 1,125
Preproduction costs 1,977 2,545
Selling, general and
administrative expenses 6,920 4,913
Total other expenses 11,436 9,733
Income (loss) from operations $20,786 $(468)
Segment Operations - Ovonic Materials
(In Thousands)
Quarter ended
September 30,
2008 2007
Product sales $1,351 $2,615
Cost of product sales 1,437 2,568
Other revenues:
Royalties 1,345 1,015
Product development
agreements 910 860
Other revenues 273 602
Other revenues total 2,528 2,477
Total revenues 3,879 5,092
Other expenses:
Cost of revenues from
product development
agreements 627 577
Product development and
research 1,206 2,338
Selling, general and
administrative Expenses 355 309
Total other expenses 2,188 3,224
Income (loss) from operations $254 $(700)
Segment Operations - Corporate Activities
(In Thousands)
Quarter ended
September 30,
2008 2007
Other revenues $75 $169
Other expenses:
Selling, general and
administrative expenses 7,157 6,486
Restructuring costs 245 2,516
Total expenses 7,402 9,002
Loss from operations $(7,327) $(8,833)
